Barnes & Noble's (BKS, Fortune 500) stock shot up 25% in premarket trading, pushing the stock above $17 a share -- an indication that investors believe that negotiations between the bookseller and Liberty could produce an even higher buyout price.

The company said a special committee of its board is evaluating the proposal, which is contingent on participation by founding Barnes & Noble chairman Leonard Riggio.

Barnes & Noble is the largest operator of traditional book stores, with 705 stores in 50 states.

Liberty, run by John Malone, includes such properties as the Starz premium cable network and the Atlanta Braves baseball team.